A DISTRICT SCALE

RESOURCE DEVELOPER AND EXPLORER

FORWARD-LOOKING INFORMATION AND STATEMENTS

This presentation contains “forward-looking information” and “forward-looking statements” within the meaning ofapplicable securities laws. This information and statements address future activities, events, plans, developmentsand projections. All statements, other than statements of historical fact, constitute forward-looking statementsor forward-looking information. Such forward-looking information and statements are frequently identified bywords such as “may”, “will”, “should”, “anticipate”, “plan”, “expect”, “believe”, “estimate”, “intend” and similarterminology and reflect assumptions, estimates, opinions and analysis made by management of Defiance in lightof its experience, current conditions, expectations of future developments and other factors which it believes tobe reasonable and relevant. Forward-looking information and statements involve known and unknown risks anduncertainties that may cause Defiance’s actual results, performance and achievements to differ materially fromthose expressed or implied by the forward-looking information and statements and accordingly, undue relianceshould not be placed thereon. Risks and uncertainties that may cause actual results to vary include but are notlimited to the speculative nature of mineral exploration and development, including the uncertainty of reserveand resource estimates; operational and technical difficulties; the availability of suitable financing alternatives;fluctuations in gold and other commodity prices; changes to and compliance with applicable laws and regulations,including environmental laws and obtaining requisite permits; political, economic and other risks arising fromDefiance’s South American activities; fluctuations in foreign exchange rates; as well as other risks anduncertainties which are more fully described in our annual and quarterly Management’s Discussion and Analysisand in other filings made by us with Canadian securities regulatory authorities and available at www.sedar.com.Defiance disclaims any obligation to update or revise any forward-looking information or statements except asmay be required by law.

NI43-101 DISCLOSURE:

Peter J. Hawley, P. Geo., a Qualified Person under the meaning of Canadian National Instrument 43-101 is responsiblefor the technical information in this presentation.

2

DISCLAIMER

FOCUS ON MEXICO

❖ A leading Mexico focused explorer

❖ An advanced portfolio of silver and gold-copper

projects:

San Acacio, Zacatecas – Maiden Resource

Tepal Project – PFS Level Reserve/Resource3

Defiance Silver Corp.

MEXICAN ASSETS

TECHNICAL DISCUSSION

• TWO DEFINED RESOURCES

• EXCELLENT JURISDICTIONS

• A THRIVING MINING ECONOMY

• ACCESS TO EXPERIENCED MEXICAN

LABOUR

• EXCELLENT INFRASTRUCTURE

• HISTORICAL PRODUCTION

• SURROUNDED BY ESTABLISHED

EXPLORERS AND DEVELOPERS.

4Two emerging jurisdictions with district scale growth potential

Guadalajara

Ciudad México

Acapulco

Lázaro Cárdenas

Manzanillo

Puerto Vallarta

Mazatlán

Oaxaca

SELECTED MINES AND DEPOSITS

SOUTHERN MEXICO

1. Defiance Silver – San Acacio LS Ag Mine

2. Defiance Silver - Tepal Au-Cu Resource

3. Endeavour Silver – Terronera LS Deposit

4. Agnico Eagle – Barqueño LS? Deposit

5. Evrim Resources – Cuales HS Prospect

6. Solaris Copper – La Verde Cu-Au-Ag deposit

7. Teslon Mining – Campo Morado VMS

8. Peñoles - Rey de Plata CRD Mine

9. Alio Gold – Ana Paula GGB Deposit

10. Torex Gold – ELG and CML GGB Mines

11. Leagold – Los Filos GGB Mine

12. Fortuna Silver – San Jose LS Mine

13. Candelaria Res. – Caballo Blanco HS Au

Deposit

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LS Low Sulphidation Epithermal (Ag-Pb-Zn)

HS High Sulphidation Epithermal (Au(Ag), Cu

VMS Volcanogenic massive sulphide Zn (Cu) (Ag,Au,Pb)

CRD Carbonate Replacement Deposit Zn (Ag, Pb)

GGB Guerrero Gold Belt Skarn-Porphyry Au (Cu, Fe)

Inset map showing tectono-stratigraphic terranes, after Centeno-García E et al. Geological Society of America Special Papers 2008;436:279-308

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THE MEXICAN ALTIPLANOAN ESTABLISHED MINING DISTRICT

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SAN ACACIO PROJECT

A High-Grade, Wide-Vein

Silver-Lead-Zinc Epithermal Vein System

“BUILDING A STRATEGIC LAND BASE”

ZA

CA

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CA

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✓ Recently acquired MAG Silver’s

Zacatecas Holdings

✓ Doubled the San Acacio land

package to 1506 has.

✓ A strategic location in a mining

district that dates back to colonial

history.

✓ Several district mines continue in

operation and development today.

✓ Neighbours include the districts

largest operator, Capstone

Mining’s Cozamin Mine, producing

1Moz Ag, 36.9Mlb Cu & 9.3Mlb Zn

in 2017 (2017 Capstone Mining Financials).

✓ AN excellent infrastructure with

paved roads, access to the state

power grid and a skilled Mexican

labour force, mining friendly.

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SAN ACACIO PROJECTS

CONSOLIDATING A MINING DISTRICT

Extending a footprint in an important mining camp(Defiance Silver News Release June 13, 2018)

Zacatecas State

San Acacio

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SAN ACACIO MINE PROJECT

HISTORIC MINING DISTRICT

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Historic district production is estimated

to be 750,000,000 ounces of silver from

20 million tonnes grading over 900 g/t

silver and approximately 2.5 g/t gold.(Consejo de Recursos Minerales; Cardenas et al 1992).

The San Acacio mine was historically

mined to a maximum depth of 120meters, to the base of the oxide zone, at

approx. grades of 200 g/t silver not

including by-product.

The San Acacio Mine was mined along a

1.2km portion of a 5.6 Km strike length

controlled by Defiance Silver.

A historic production estimate indicate

approximately 750,000 to 1,000,000

tonnes of ore was mined with grades

exceeding 1kg/t Ag at San Acacio.(Atlas Mining, SEC filings)2014 NI43-01 Report, Defiance Silver.E

stab

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Min

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MAG Silver Corp Invests in Exploration Upside

Dr. Peter Megaw

MAG Silver’s Chief Exploration Officer

“…MAG chose to partner with Defiance because of our long-held interest in the exploration potential of the Veta Grande Vein, the second

most important vein in the billion-ounce Zacatecas silver district. A number of high-grade ore-shoots have been found along its length and the ability to expand exploration to a continuous 5.6 km stretch of this

historically under-explored vein greatly enhances the potential for discovering more. This strategic interest in Defiance provides MAG with exposure to the upside of future discoveries as their exploration of this

important vein advances.”

(See Defiance News Release June 13, 2018)

SAN ACACIO PROJECTS

LAGARTO PROJECT ACQUISITION

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➢ Adds 14 key contiguous and non-contiguous concessions totalling 800 has.

➢ Adds important strike/dip potential to the San Acacio claims on the historic Veta Grande Vein system.

➢ Shares a border on trend SE of Santacruz Silver Mining Ltd. Contracuña Mine.

➢ Adds a large claim block on the Malanoche vein system, currently being mined by Capstone Mining Corp.; at their Cozamin Mine.

➢ Regional database that cost over $10 million to assemble, including:

➢ A drill database for 90 holes, extensive geochemistry, geophysics, satellite imagery, and detailed drill logs from over 135,000ha of ground covering the Zacatecas Silver District to the Fresnillo Silver District.

➢ An important upside exploration potential:

➢ Significant drilling highlights include:

850 g/t (24.8 ounces per tonne) silver over 0.95 meters; 417 g/t (12.1 ounces per tonne) silver over 1.0 meter

DEFIANCE SILVER NOW CONTROLS A TOTAL OF 1506 HAS IN THE

IMPORTANT ZACATECAS MINING DISTRICT.

SAN ACACIO PROJECTS

LAGARTO PROJECT ACQUISITION

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SAN ACACIO MINE PROJECT

2014 MAIDEN INFERRED RESOURCE

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Deposit Type Silver-lead-zinc epithermal

Stage 43-101 Inferred Resource

Location 5km SW of Veta Grande, Zacatecas, MX

8 km Northeast of Zacatecas City

Infrastructure Excellent road, power grid, water and experienced Mexican labour

Ownership Under Option

Royalties 2.5% ROFR

Land Package 1506 ha

AgEq Cut-off Tonnes > Cut-off Grade>Cut-off Contained Metal

Vein (g/t) (tonnes) Ag(g/t) Au (g/t)AgEq

(g/t)Ag (ozs) Au (ozs) AgEq (ozs)

VETA G 100 2,150,000 192.43 0.19 204.66 13,302,000 10,000 14,147,000

VETA C 100 739,000 153.28 0.08 158.66 3,642,000 1,900 3,770,000

VETA B 100 13,000 76.53 0.45 105.98 32,000 190 44,000

TOTAL 100 2,902,000 181.94 0.16 192.5 16,976,000 12090 17,961,000

VETA G 120 2,020,000 197.97 0.2 210.64 12,857,000 10,000 13,680,000

VETA C 120 658,000 158.79 0.09 164.48 3,359,000 1,900 3,480,000

TOTAL 120 2,678,000 188.34 0.17 199.3 16,216,000 11,900 17,160,000

The San Acacio Deposit has a 43-101 Inferred Mineral Resource Estimate available on www.sedar.com or www.defiancesilver.com. Using a silver equivalent (“AgEq”)* cut-off grade

of 100 grams tonne (“g/t”). Using a gold price of $1270/ oz Au and silver price of $19.60 the silver equivalent value would be silver content plus 65 times the gold content. (Note:

total contained AgEq values may not add exactly because of rounding). Metallurgical recoveries are not taken into account. Giroux and Cuttle, 2014 NI43-101.

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SA17-140.6m @ 276.74

g/t AgEq

SA17-1310.0m @ 204.65 g/t AgEq

SA95-393.0m @ 125.12 g/t AgEq

SA17-1227.03m @ 202.99 g/t AgEq`

SA95-16 1.4m @ 190.00 g/t AgEqAnd

12.74m @ 285.31 AgEq

SA95-154.1m @ 120.13 g/t AgEq

And9.2m @ 299.94 g/t AgEq

SA95-393.4m @ 75.57 g/t AgEq

SA17-140.88m @ 236.21

g/t AgEq

SA17-140.3m @ 520.27

g/t AgEq

Cross Section L9700E: 2017 Drill core Assay Results shown with historic results from 1995 drilling. Viewed northwesterly.

SA17-14

SA17-13

SA95-16

SA17-12

SA95-39

SA95-39

SA95-15

SA95-16

SA17-12

SA17-13

SA17-14

SA95-15

Hole_ID From (m) To (m) Length (m) Ag g/t Au g/t AgEq g/t

SA17-12 226.62 253.65 27.03 148.2 0.29 202.99

Includes 226.62 234.20 7.58 212.9 0.05 230.03

Includes 238.00 243.00 5.00 230.7 0.51 354.97

Includes 247.60 253.65 6.05 122.1 0.74 222.59

SA17-13 261.00 271.00 10.00 171.2 0.08 204.65

Includes 261.00 264.00 3.00 372.2 0.10 404.03

Includes 266.00 271.00 5.00 104.4 0.08 136.15

SA17-14 308.07 308.67 0.60 139.5 0.40 276.74

SA17-14 314.12 315.00 0.88 213.8 0.30 236.21

SA17-14 318.00 318.30 0.30 477.6 0.46 520.27

SA17-15 209.82 213.00 3.18 285.0 0.02 296.30

SA17-16 393.30 399.48 6.18 7.4 0.25 65.88

SA17-17 439.13 440.14 1.01 33.9 0.12 187.85

Drill Results: Selected assay intervals from 2017 phase II drill program

SAN ACACIO MINE PROJECT

2017 DRILL RESULTS

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Initial drill results demonstrate a potential to increase the current resource by drilling

on strike and at depth along the Veta Grande Vein System.

✓ San Acacio is at an early

development phase similar to

where the Cozamin mine was

before it became a major mining

operation

✓ Defiance Drilling confirms

geological model of high level

Silver/Lead/Zinc zones near

surface, and indications of

Gold/Copper zones at depth

✓ San Acacio has wide veins. Wide

vein widths are important for

profitable mining tonnage

✓ Width of mineralized

intersections range from 5-27m

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AN ESTABLISHED GEOLOGICAL

MODEL DRIVEN EXPLORATION

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OPEN

IP Survey

Location

NW Property Boundary

Calcite

Upper sulfides

Amethyst Zone

Sulphide Zone

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Another 4.4 km remains

Underexplored on Strike

E

0 200

Metres

San Acacio Mine Vertical Long Section viewed northeast.

Shows mine workings, drill holes.

Santacruz’s Contrcuña Mine

✓ NW-SE Trending IP

anomaly located near

surface

✓Successfully Located

vein beneath thin cover

✓Detected a new

anomaly in vein footwall

at 200m depthIP Survey Plan view north IP Survey 3D Chargeability Inversion model – Oblique view north

1.2 Km Strike of Current

Resource

NEW DISCOVERY POTENTIAL

COINCIDENT ANOMALIES

Down dip remains under explored

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Atomic Energy Resonance

Imaging Survey (AERI)

✓ Confirmation of IP

Anomaly is a technical

success.

✓ Anomaly measures

400m in width, 300m in

length, and is open.

✓ Shape, size and mineral

zonation compares

favourably with

geophysical images

generated by Capstone

Mining on their nearby

Cozamin Mine at depth

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NEW DISCOVERY POTENTIAL

A NEW EXPLORATION TARGET

AERI survey independently confirms the IP geophysical anomaly

AERI results extends the IP anomaly to a depth of 1000m from surface

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SAN ACACIO PROJECT

EXPLORATION PLANS

San Acacio is drill ready and permitted

Two Important Targets for Follow Up:

1. Increase the resource. The Veta Grande Vein System:

Follow up 2017 phase 1 drill program that successfully extended mineralization by 140m

below the base of the maiden resource, improved the resource grade, and extended the

strike potential of the vein by 550m. Phase 2 drilling seeks to expand on this success. (Phase

1 drilling completed 5000m in 17 shallow diamond drill holes).

2. New Discovery potential. The new coincident IP/AERI geophysical targets identified in 2017

add an important new discovery potential.

Coincident Induced Polarization (IP) and Atomic Energy Resonance Imaging (AERI)

geophysical surveys independently defined a large anomaly below the area of shallow

drilling that merits follow up drilling

Next Steps

1. Update the resource - Phase 2 drilling of the Veta Grande vein. Follow up of Phase 1.

2. Test the new discovery potential - Drill the IP/AERI geophysical anomaly.

3. Prep for phase 3 along remainder of the Veta Grand vein controlled by Defiance:

• Property scale geophysics

• Property scale mapping, updated sections, geochemistry etc.

• Review the San Acacio option agreement, terms successfully extended to 2020.

Up

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Guadalajara

Ciudad México

Acapulco

Lázaro Cárdenas

Manzanillo

Puerto Vallarta

Mazatlán

Oaxaca

SELECTED MINES AND DEPOSITS

SOUTHERN MEXICO

1. Defiance Silver – San Acacio LS Ag Mine

2. Defiance Silver – Tepal Au-Cu Resource

3. Endeavour Silver – Terronera LS Deposit

4. Agnico Eagle – Barqueño LS? Deposit

5. Evrim Resources – Cuales HS Prospect

6. Solaris Copper – La Verde Cu-Au-Ag deposit

7. Teslon Mining – Campo Morado VMS

8. Peñoles - Rey de Plata CRD Mine

9. Alio Gold – Ana Paula GGB Deposit

10. Torex Gold – ELG and CML GGB Mines

11. Leagold – Los Filos GGB Mine

12. Fortuna Silver – San Jose LS Mine

13. Candelaria Res. – Caballo Blanco HS Au

Deposit

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LS Low Sulphidation Epithermal (Ag-Pb-Zn)

HS High Sulphidation Epithermal (Au(Ag), Cu

VMS Volcanogenic massive sulphide Zn (Cu) (Ag,Au,Pb)

CRD Carbonate Replacement Deposit Zn (Ag, Pb)

GGB Guerrero Gold Belt Skarn-Porphyry Au (Cu, Fe)

Inset map showing tectono-stratigraphic terranes, after Centeno-García E et al. Geological Society of America Special Papers 2008;436:279-308

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SOUTHERN MEXICO

AN UNDEREXPLORED AU-CU-AG BELT

A large Gold-Copper advanced stage deposit with

district scale growth potential.

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TEPAL PROJECT

A 4M OZ AUEQ RESOURCE

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✓ A large-scale Au-Cu deposit in a

mining friendly and secure

jurisdiction

✓ 100% ownership

✓ Current M&I resource of 4.0 Moz.

AuEq. (Using US$1250./oz. Au,

US$2.50/lb. Cu, $18.00 Ag)

✓ C$27M spent to-date

✓ Excellent infrastructure: road

accessible, water, and port facilities

✓ Surface rights are private

landowners.

✓ Power - 50 megawatts available today

(28 MW required). Main Power grid

is 14 kilometres from site. 10 Kv is

1.5 Km away.

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TEPAL PROJECT

“CHECKS ALL THE BOXES”

Concession Title Issuance date Hectares

Tepal 219924 06/05/2003 986

Tepal Fracc. 1 216874 04/06/2002 140

Tepal Fracc. 2 216875 04/06/2002 70

Tepal Fracc. 3 216876 04/06/2002 90

La Esperanza Fracc. 1 216873 04/06/2002 120

Total 1406

Tepal Fracc 3

Tepal Fracc 1

Tepal

La EsperanzaTepal

Fracc 2

Inset: State of Michoacan

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TEPAL PROJECTNI 43-101 M&I RESOURCE ESTIMATE

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1. Au = gold, Cu = copper, Ag = silver, Mo = molybdenum, g/t = grams per tonne, % = percent, oz. = ounces, lbs. = pounds,

The in situ resource stated in the table conforms to CIM guidelines for reasonable potential for economic extraction and is not to be confused as reserves.

2. Resource numbers above are rounded to nearest 100,000 tonnes and may not add up, 1,000 oz Au, 1,000,000 lbs Cu and 1,000 oz.

3. AuEq 2 uEq = gold equivalent and is calculated using gold and copper only using USD $1000 Au, USD $2.75 Cu metal prices (AuEq = (lbs. Cu*$2.75/$1000) + Au oz)

After JDS 2017 PEA..

Updated Resource Estimate

DepositResource

CategoryTonnage (kt)2

Average Grade1 Contained Metal

Au (g/t) Cu (%) Ag (g/t) Mo (%) Au (Koz) Cu (Mlb) AuEq3 (koz)

Tepal North

Measured 14,000 0.50 0.29 0.78 0.002 228 89 473

Indicated 55,000 0.30 0.21 1.01 0.002 533 252 1,226

M + I 69,000 0.34 0.22 0.96 0.002 761 341 1,699

Tepal South

Measured 20,000 0.47 0.22 1.07 0.002 300 96 564

Indicated 21,000 0.45

0.20 1.17 0.002 305 91 555

M + I 41,000 0.46 0.21 1.12 0.002 605 187 1,119

Tizate

Measured - - - - - - - -

Indicated 77,000 0.18 0.17 2.29 0.006 438 285 1,222

M + I 77,000 0.18 0.17 2.29 0.006 438 285 1,222

Total

Measured 34,000 0.48 0.25 0.95 0.002 528 185 1,037

Indicated 153,000 0.26 0.19 1.67 0.004 1,276 628 3,003

M + I 187,000 0.30 0.20 1.54 0.004 1,804 813 4,040

Inferred 35,000 0.16 0.15 1.68 0.006 182 120 512

A 4 million ounce gold equivalent resource (Au-Cu)

Pre-tax NPV5%

$299M

$0

$200

$400

$600

$800

$1,000

$1,200

0

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100

150

200

250

300

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LOM Production & Cash Costs

Au AuEq. AISC/oz.

Pre-tax IRR

$36%

Payback

1.6 Yrs

Post-tax NPV5%

$169M

Post-tax IRR

$24%

Payback

2.3 Yrs

Production Averages

LOM 10 Years

Au: 79,000 oz

Cu: 32Mlbs

LOM 10 Years Per Oz Au Cost

Avg cash cost $313/oz AISC $396/oz

Initial Capital Cost

$214M

LOM

10 Years

Using base case price assumptions of $1,250/oz. gold, $2.50/lb copper and $18.00/oz. silver, Tepal has an estimated $169 million after-tax NPV at a 5% discount rate, an attractive 24% after-tax IRR, and an after-

tax payback period of 2.3 years. Base case LOM revenue split is 54% gold/43% copper/3% silver. The base case economic evaluation used metals prices that are close to current spot prices and near the median of

current medium to long term analyst forecasts. After-tax economics were prepared using the following assumptions: a 2.5% Net Smelter Return (NSR) royalty, 0.5% Mexican royalty based on precious metals

revenue, 7.5% Mexican royalty based on EBITDA, 12% annual depreciation rate, accumulated tax loss carry forward of US$22.4 million, and a 30% Mexican income tax rate. Please see News Release dated

January 29, 2017

(1) Using US$1,250/oz. Au price, US$2.50/lb. Cu price and US$18.00/oz. Ag price

(2) Cash cost includes all mining, milling & refining, transport, mine-level G&A, and royalty costs; net of byproduct credits

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LOW COST, ACCRETIVE & LARGE

2017 PEA HIGHLIGHTS ($USD)R

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Assumptions used to Estimate the 2017 PEA Economics

Table 1: Flotation Concentrate & Tails Cyanidation Recovery

Estimates

Tepal Recovery Flotation Tails Cyanidation Combined Recovery

Copper % 88.2 88.2

Gold % 62.4 16.5 78.9

Silver % 27.4 15.5 40.2

Tizate Recovery

Copper % 85.9 85.9

Gold % 58.0 16.0 74.0

Silver % 59.6 18.5 78.1

Table 2: Oxide Leach Recovery Estimates

Tepal Recovery

Gold % 83.2

Silver % 63.3

Tizate Recovery

Gold % 75.2

Silver % 55.9

TEPAL PROJECT

METALLURGY

Two independent processing circuits:

1. Oxide Milling (~13% of total material)

Recovery averages 81% Au, 60% Ag.

Grind -> CIL -> Doré -> Refiners.

2. Sulphide Milling (~87% of total material)

Recovery averages 77% Au, 65% Ag, 87% Cu.

Concentrate -> Smelters, Doré -> Refiners.

Average Concentrate Grade: 26% Cu, 28 g/t

Au, 99 g/t Ag.

Concentrate is very clean and in demand.

No smelter penalties.

Ideal for blending. 98% of the mine plan material is measured and indicated

2% of the mine plan material is inferred

The base case used metals prices of USD$1250 gold, $2.50 copper, $18.00 silver.

Recoveries are based on Tables 1 nd 2 summarized from 2017 PEA, JDS..

Standard industry processes that are simple and familiar22

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Operating AssumptionsMillions

($USD)

Pre-Production Capital Costs $214.2

Sustaining Capital Costs $86.7

Mine Life 9.8 years

Total Material Mined 142.9 Mt

Strip Ratio 0.6 : 1

Average Plant Throughput (Sulphide + Oxide) 9.6 Mtpa

Average Au Sulphide Head Grade 0.33 g/t

Average Cu Sulphide Head Grade 0.21%

Average Au Oxide Head Grade 0.45 g/t

LOM Average Au Sulphide Recovery (combined Flotation & CIL) 77%

LOM Average Cu Sulphide Recovery 87%

LOM Average Au Oxide Recovery 81%

(1) $USD Cash cost includes all mining, milling & refining, transport, mine-level G&A, and royalty costs.

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TEPAL PROJECT

2017 PEA ASSUMPTIONS

Operating Cost Assumptions Avg Annual (M$) $/t processed LOM (M$)

Mining* 31 3.30 299

Processing–Sulphide Flotation/Cyanidation 44 4.75 430

Processing–Oxide CIL 8 0.85 77

G&A 7 0.75 67

Total 90 9.65 873*Avg. LOM Mining $USD cost amounts to $2.16/t mined at a 0.6:1 strip ratio (excluding pre-production tonnes mined).

Totals may not add due to rounding

Source: JDS (2017)

Assumptions used to Estimate the 2017 PEA Economics

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Parameter Unit 2013 PFS 2017 PEA

Cu Price US$/lb 3.44 2.50

Au Price US$/oz 1389.95 1,250

Ag Price US$/oz 26.03 18.00

PRODUCTION

Mine Life Years 11.5 9.8

Total LOM Ore M tonnes 149.6 90.5

Total LOM Waste M tonnes 267.6 52.5

Total LOM Mined M tonnes 417.2 142.9

Strip Ratio w:o 1.8 0.6

Average Plant Throughput M tpa 13.0 9.6

Cu Head Grade – Sulphide % 0.20% 0.21%

Au Head Grade – Sulphide g/t 0.30 0.33

Ag Head Grade – Sulphide g/t 1.50 1.47

Au Head Grade – Oxide g/t 0.42 0.45

Ag Head Grade – Oxide g/t 1.25 1.11

Payable Cu LOM LOM M lbs 503.1 308.0

Payable Au LOM LOM k oz 1,164 766

Payable Ag LOM LOM k oz 2,952 2,458

OPEX

Mining $/tonne milled 4.09 3.30

Processing - Sulphide Flotation $/tonne milled 6.095.49

Processing - Sulphide Cyanidation $/tonne milled 0.87

Processing - Oxide Cyanidation $/tonne milled 6.82

Processing - Oxide CIL $/tonne milled 6.34

G&A $/tonne milled 0.54 0.75

Tailings $/tonne milled 0.03

Leasing Costs $/tonne milled 0.54

Total OPEX $/tonne milled 12.09 9.65

OTHER

Cash Cost (Net of By-Product Credits) $/Payable Au oz 170 313

Cash Cost (Net of By-Product Credits incl. of

Sustaining Capital) $/Payable Au oz 251 396

CAPEX

Pre-Production Capital $ M 353.8 214.2

Sustaining & Closure Capital $ M 43.6 86.7

Total Capital + Contingency $ M 397.4 300.9

ECONOMIC RESULTS

Pre-Tax NPV5% $ M 590.3 299.4

Pre-Tax IRR % 35.9% 35.9%

Pre-Tax Payback Period Years 2.7 1.6

After-Tax NPV5% $ M 421.2 169.4

After-Tax IRR % 27.7% 23.6%

After-Tax Payback Period Years 3.2 2.3

• Updated the economic base case metal

prices

• Revised Whittle pit optimization at lower

metal prices

• Revised process flow sheet consisting

primarily of:

– Reduction of the sulphide flotation

throughput from an average 37,000

t/d to 22,000 t/d

– Change from batch grinding oxide

material in the SAG and ball mills to

an independent oxide crushing and

grinding circuit

– Increase of oxide CIL retention time

from 8 hours to 24 hours

• Mining operating costs based on contractor

mining rates. Rented fleet vs owned.

• Revised mining schedule based on changes

to the process plant

• Updated capital and operating cost estimates

(CAPEX and OPEX) based on revised

designs and more recent equipment

budgetary pricing

TEPAL PROJECT

TEPAL 2017 PEA VS. 2013 PFSR

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PEA Production Profile

$0

$200

$400

$600

$800

$1,000

$1,200

0

50

100

150

200

250

300

1 2 3 4 5 6 7 8 9 10

Co

st/oz. (U

S$)

An

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LOM Production & Cash Costs

Au AuEq. AISC/oz.

(1) Using US$1,250/oz. Au price, US$2.50/lb. Cu price and US$18.00/oz. Ag price

(2) Cash cost includes all mining, milling & refining, transport, mine-level G&A, and royalty costs; net of

byproduct credits

Production Year units 1 2 3 4 5 6 7 8 9 10 LOMResource Mined Mt 12.2 10.4 8.5 8.7 9.5 9.5 8.1 8.1 8.0 6.0 90Waste Mined Mt 3.0 6.7 3.3 4.7 6.1 6.9 3.8 3.9 1.7 0.2 52Strip Ratio w : o 0.2 0.6 0.4 0.5 0.6 0.7 0.5 0.5 0.2 0.0 0.6Payable Gold koz. 133 115 119 80 94 60 40 40 35 28 766Payable Copper Mlbs. 52 34 33 32 36 27 25 24 28 18 308Payable Silver koz. 123 136 156 123 108 353 461 357 345 271 2,458Gold Equivalent(1) koz. 239 186 186 146 167 119 95 93 95 68 1,418All-In Sustaining Cash Cost(2) US$/oz. $1 $291 $322 $394 $261 $705 $757 $828 $581 $1,094 $396

-$300

-$200

-$100

$0

$100

$200

$300

-2 -1 1 2 3 4 5 6 7 8 9 10

Cas

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(U

S$M

)

LOM After-Tax Cash Flow

After-Tax Cash Flow Cumulative After-Tax Cash Flow

Average annual cash flow (Years 1-5) is US$82 million/year = rapid capital payback

TEPAL PROJECT

TEPAL 2017 PEAR

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Price Sensitivity% Δ in Base Case Metals Prices -10% 0% 10%

Gold Price (US$/oz) $1,125 $1,250 $1,375

Copper Price (US$/lb) $2.25 $2.50 $2.75

Silver Price (US$/oz) $16.20 $18.00 $19.80

All-In Sustaining Costs (net of byproducts):

Gold (US$/oz) $497 $396 $296

Copper (US$/lb) $0.69 $0.38 $0.07

Pre-Tax:

NPV5% (US$ millions) $165.6 $299.4 $433.3

IRR (%) 25% 36% 46%

Payback Period (years) 2.2 1.6 1.3

After-Tax:

NPV5% (US$ millions) $77.5 $169.4 $257.2

IRR (%) 15% 24% 31%

Payback Period (years) 3.0 2.3 1.9

PEA Production HighlightsAverage Oxide Milling Rate: 5,500 tonnes per day

Average Sulphide Milling Rate: 22,000 tonnes per day

Years 1-5 Average Payable Production: 108,000 oz./yr Au and 37 Mlbs./yr Cu

LOM Average Payable Production: 79,000 oz./yr Au and 32 Mlbs./yr Cu

LOM Payable Production: 766,000 oz. Au and 308 Mlbs. Cu

AIC Cost plus Sustaining Cost(1), net of by-product credits: $396/oz. Au

TEPAL PROJECT

FINANCIAL HIGHLIGHTS

Cu,43%

Au,54%

Ag,2%

LOM Revenue Split

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TEPAL PROJECT

2017-18 EXPLORATION PROGRAM

Objectives:

1. Test the potential to increase the existing resource/grade

2. Test the potential for new discovery

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2017 Exploration Budget of US$300,000 was used

in a multi-disciplined program, including:

• Database management.

• Surface sample audit program.

• Structural mapping.

• Outcrop and core alteration mapping (XRF and XRD).

• Susceptibility and physical properties modelling of core.

• Geochemistry evaluation.

• Re-logging of select drill holes.

• Regional structural and alteration studies.

• Geophysical modelling (3D Inversions).

➢ A NEW MINERALIZATION MODAL

➢ SIGNIFICANT UNTESTED POTENTIAL …RESULTS

The 2017-18 exploration program has changed how we explore…

TEPAL PROJECT

USE OF PROCEEDS

28

Start by looking for the vectors

NSR Value ($/t)8 to 10 25 to 30

10 to 15 30 to 40

15 to 20 40 to 50

20 to 25 > 50

South Pit

North Pit

Long section location Inset

North Pit

South Pit

Tizate

Metal values are zoned

along structural

controls

TEPAL PROJECT

1. INCREASE THE RESOURCE

29

Tepal NSR Value Block Model: Vertical Section viewed southwest.

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NORTH

PIT

SOUTH

PIT TIZATE

PIT

✓ The Optimized 2017 PEA pit shells significantly lowered the strip-ratio (0.6 : 1) vs. PFS pit

shells (1.8 : 1), and switched the fleet from bought to rented.

✓ 47 MT were not included in the 2017 PEA, as available per the 2013 PFS Shell at higher

metal prices = ~6 years @ 22,000 tpd rate

2017 PEA Pit Shell($1,250/oz Au, $2.25/lb Cu, $20.00/lb Ag)

2013 PFS Pit Shell($1,400/oz Au, $3.15/lb Cu, $26.00/lb Ag)

30

TEPAL PROJECT

1. INCREASE THE RESOURCE

Optimize and update the current resource

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Metal value contours show

consistent zoning along

structural controls

Under tested feeder

potential?

3D Voxol of 2017 PEA resource GMV (see previous slide) block model, a) plan view, b) Oblique view looking north-easterly.

Drilling optimised along these trends may increase the current resource

North Pit

(2017 PEA )

South Pit

(2017 PEA )

Mineralized trends are

untested along

strike/dip

North Pit

(2017 PEA )

South Pit

(2017 PEA )

The 3D model completed in Q3 2018 confirms an important untested potential

following structural controls that may help to increase the overall grade of an

updated resource. 31

TEPAL PROJECT

1. INCREASE THE RESOURCE

0 metres 400

GMV BLOCK MODEL

COLOUR LEGEND

$Au + $Cu

≥ USD $50

≥ USD $40

≥ USD $30

≥ USD $20

≥ USD $10

Look for new potential

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Parameters Oxide Sulphide

Gold Price (US$/oz) 1300.00

Copper Price (US$/lb) 3.30

Recovery (%) Tizate Au 68.8 66.2

Recovery (%)Tizate Cu 6.8 85.3

Recovery (%) Tepal Au 78.4 60.7

Recovery (%)Tepal Cu 14.3 87.4

Gross Metal Value (GMV) Parameters

GMV BLOCK MODEL

COLOUR LEGEND

$Au + $Cu

≥ USD $50

≥ USD $40

≥ USD $30

≥ USD $20

≥ USD $10

3D GMV Model – South Pit

Oblique section viewed northwest

through the center of the resource,

Clipped to 480m Elev.

Drill holes

South Pit (2017 PEA )

Oblique section through the proposed south pit. A 3D smoothed voxol model of the

2017 PEA gross metal value (GMV) block model, Z-axis is clipped to 580mEl. This

section shows a low grade feeder zone exits beneath the south pit, with a (+USD$50)

high grade core whose grade may be increasing at depth. This feeder remains largely

under drilled. None of this material is included in the resource.

Looks northwesterly.

A potential for improving grade at depth

32

TEPAL PROJECT

1. INCREASE THE RESOURCE

0 metres 400Reso

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Early Days: Using available data (such as the

airborne Th/K survey (left), returned some

unexpected results.

• Tepal’s proposed pits (in white) line up

within a jog of a regional NE structure.

• Mineralization is hosted in rocks depleted

in K.

• Very little intrusion occurs on the property

or in core. Host rock is a highly clay altered

andesite breccia with little silica.

This was a strong indication that something

more that a porphyry deposit may be

underlying the property.

Importantly, it has a regional scale exploration

potential.

TEPAL PROJECT

2. NEW DISCOVERY POTENTIAL

Plan view of an eThK % pseudocolour xy grid after Aeroquest Spectral data.

Intrepid, 2012. Black ovals are Geophysicists exploration picks. On this image, blue

and cool tones tend to be depleted in potassium (K,) while reds or warm tones tend

to be enriched in K.

TEPAL DIV 2

Claim Boundary0 Kilometres 4.0

33

DATA REVIEW

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Surface assay results are compiled from undifferentiated historic data (soil, stream and outcrop samples). These results remain to be field

verified, as such, this map should be considered preliminary and interpreted with caution

Gold assay overlay on IP resistivity 150m depth plan

- Outcrops with vuggy Silica

and high Temp Clays

- Rancho Tepalcualtita

34

Gold assay overlay on IP chargeability 150m depth plan

• Geochemical and geophysical data compilation was followed up with regional prospecting, core-re-

logging, and a new structural and alteration survey.

• Coincident vuggy silica and high Tᵒ clays in scattered outcrop, high grade gold geochemistry at surface,

favourable high resistivity with coincident high chargeability IP suggests an as yet untested high grade

potential underlying the Tepal project.

• A similar potential was identified regionally in sporadic outcrop over a 7Km trend.

TEPAL PROJECT

2. NEW DISCOVERY POTENTIAL

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Quartz Vein with massive sulphide

TIZ-11-018: 1.42m 282.95 to 284.37m

(true width not known)

25.3 g/t Au, 565 g/t Ag

Quartz Vein in Fault Breccia

TEP-11-128: 394.5m

4.10 g/t Au, 0.109% Cu

Breccia dikes

TEP-11-26: 402.1m

1.445 g/t Au, 0.475% Cu

Stockwork in Andesite Breccia

TEP-11-26: 387.0m

1.835 g/t Au, 0.523% Cu

Core Review: High grade in core supports a high grade potential that merits follow up

TEPAL PROJECT

2. NEW DISCOVERY POTENTIAL

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• Early stage exploration drilling in 2012 confirmed a north trending corridor that hosts a Au-

Ag mineralization that remains underexplored to this date.

• The shallow drill holes were consistently anomalous in Ag and As, with gold increasing at

depth in an area of coincident geophysical anomalies that correlates with surface geochem

Ag ppm As ppm

0.0 2.0

Kilometres

IP

Chargeability (ρ)

Plan view of silver block model voxels

over 3D voxel IP Chargeability 150m depth

_2114325_

_2116500_

_2117500_

l

717000

l

718000 l

717000

l

718000

TIZ-11-018: 282.95 to 284.37m

25.3 g/t Au, 565 g/t Ag

Plan view of arsenic block model voxels

over 3D voxel IP Chargeability 150m depth

Coincident IP

chargeability

36

Topography

depression

Consistent and coincident exploration anomalies from all sources merit follow up

TEPAL PROJECT

2. NEW DISCOVERY POTENTIAL

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✓ Near term potential to expand the current resource

Follow newly identified structural controls and feeders beyond existing shell limits.

✓ Potential to improve the grade of the resource

Assess untested structures within the existing resource for potential to increase grade.

✓ A new discovery potential

• The recognition of two mineralizing events

1. Intrusion related mineralization: Relates to lower grades ( Au≥ 0.06 – to 1.0 g/t).

➢ Correlates with (Cu,Mo,Ag)(S)(Fe,Co).

2. Epithermal related mineralization: Relates to higher grades (Au > 1.0 g/t to 4.1 g/t)

➢ Correlates with (Ag,Pb,Sb)(As).

• The recognition of important exploration indicators in outcrop

Vuggy silica, high temperature clays (pyrophyllite, dickite), possible sinter and native sulphur in

outcrop and in core.

✓ An exciting new exploration model

The 2017-18 exploration program has resulted in the discovery of a mineralized

epithermal system with high grade potential that has the ability to become a game

changer. This will be followed up in 2019.37

TEPAL PROJECT

EXPLORATION RESULTS

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Plan view of an eThK % pseudocolour xy grid, Aeroquest.

Black ovals are Geophysicists best exploration picks.

0 Kilometres 4.0

TEPAL PROJECT

A REGIONAL SCALE EXPLORATION POTENTIAL

Tepal

Tepal DIV 1

A New Exploration Target

• A plan map with the location of

showings of vuggy silica discovered

to date in outcrop;

• The trend is exposed over seven

kilometers in discontinuous clay

and silica altered outcrops;

• PIMA results confirm the presence

of important high temperature clay

minerals on the Tepal property.

• Early results warrant follow up

Vuggy silica and observed in scattered outcrop with coincident clay

alteration, FeOx, and silica flooding merits follow up observed over a 7Km

trend.

Tepal 2

TEPAL PROJECT

A REGIONAL SCALE POTENTIAL

38

Exp

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Q1 2019

➢ Field check 2017-18 results

➢ Geophysics

➢ Mapping

➢ Pima (XRD) survey

➢ Update permits (Including

existing MIA permit)

➢ Fine tune drill targets

Q2 2019?

➢ DRILLING

Chasing the high-grade39

TEPAL PROJECT

EXPLORATION PLANS

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The Circum-Pacific model encompasses many different styles of mineralization that can occur in a

continuous series from a magmatic arc porphyry through to related epithermal Cu-Au-Mo-Ag and

even VMS mineralisation. Modified from Corbett, 2002, 2004, 2008.

A classic intrusion centric porphyry model

in cross section through a typical porphyry

Cu-Au deposit with idealized but typical

alteration zoning

(after Lowell and Guilbert, 1970).

A Classic Porphyry Vs. The Bigger Picture

TEPAL PROJECT

PORPHYRY VS. CIRCUM PACIFIC MODEL

40

In exploration, its important to keep an open mind

- Anything can happen -

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In an Epithermal Model – Alteration size IS important

After Wilson and Tunningley, Exploration Alliance.

www.explorationalliance.com41

TEPAL PROJECT

EXPLORATION CASE STUDY

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PASQUA LAMA, CHILE

A cross section through Barrick Inc’s high sulphidation Pasqua Lama Mine

The deposits hosts a +10Moz Au deposit.

Like Pasqua Lama, structurally controlled HS systems can host low grade but BIG deposits.

A little inspiration?

Modified after Wilson, (undated AMA slide) and Chouinard, 2005

TEPAL PROJECT

EXPLORATION CASE STUDY

42

The Importance of Structural Controls

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CONTACT

Defiance Silver Corp

2300 – 1177 West Hastings Street

Vancouver, BC, V6E 2K3

Canada

+1 604 669 7315

www.defiancesilver.com

info@defiancesilver.com

43

http://visionofhumanity.org/indexes/global-peace-index/

General Risk

Cartel Activity Risk

Security in Mexico

• Primarily a management issue

• Based on the 2016 Global peace index,

Michoacán and Zacatecas States both

rank moderately to more peaceful

• Despite Guerrero’s title as most violent

state, it has nevertheless seen the growth

of a multi-billion dollar mining industry.

• The ongoing drug wars have had zero net

effect on the growth of mining nationally.

• Mexico remains the largest silver

producing nation as of 2017

• Gold production increased over the last

20 years from 35th to 9th place.

MEXICO

SECURITY RISK ASSESSMENT

Zacatecas

Michoacán

Zacatecas

Michoacán

44

http://visionofhumanity.org/indexes/global-peace-index/

Security in Mexico vs the USA

• The USA continues to downplay its own cartel

presence.

• The USA was last ranked in 2010, using

different parameters making direct comparison

difficult.

• The most interesting comparable is the USA

statistics for incarcerations vs. Mexico’s cartel

activity.

Cartel Activity

Incarceration

MEXICO

SECURITY RISK COMPARISON

45